ADP shows 201,000 private-sector jobs added

Earlier today, ADP announced that their survey showed that the US economy added 201,000 jobs in May. It’s the best report since January and hit analysts’ expectations, but revisions to previous months shaved 33,000 jobs off of the cumulative total for 2015:

Advertisement

Private sector employment increased by 201,000 jobs from April to May according to the May ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. …

Payrolls for businesses with 49 or fewer employees increased by 122,000 jobs in May, up from 97,000 in April. Employment among companies with 50-499 employees increased by 65,000 jobs, the same as the previous month. Employment gains at large companies — those with 500 or more employees — increased from April, adding 13,000 jobs in May, up from 3,000. However, companies with 500-999 employees lost 3,000 jobs, after adding no jobs in April. Companies with over 1,000 employees added 16,000 jobs, an improvement from 4,000 the previous month.

Goods-producing employment rose by 9,000 jobs in May, after adding just 1,000 in April. The construction industry had another good month in May adding 27,000 jobs, up from 24,000 last month. Meanwhile, manufacturing lost 5,000 jobs in May, after losing 8,000 in April.

Service-providing employment rose by 192,000 jobs in May, a strong rise from 164,000 in April. The ADP National Employment Report indicates that professional/business services contributed 28,000 jobs in May, down from April’s 35,000. Trade/transportation/utilities grew by 56,000, up from April’s 41,000. The 12,000 new jobs added in financial activities is double last month’s 6,000.

Advertisement

Last month, ADP initially showed an expansion of 169,000 jobs, revised downward now to 165,000. The BLS report came in considerably above that level, with 223,000 jobs added, but with other potential red flags, such as stagnation in wages. If the boost in hiring shows up in the BLS data on Friday, then it might show that the Q1 contraction announced by the BEA last week might be an anomaly.

Other economic indicators paint a mixed picture. The manufacturing report released today showed overall orders down 0.4% in April. Durable goods dropped even further:

New orders for manufactured goods in April, down eight of the last nine months, decreased $1.8 billion or 0.4 percent to $476.7 billion, the U.S. Census Bureau reported today. This followed a 2.2 percent March increase. Shipments, following two consecutive monthly increases, were virtually unchanged at $482.4 billion. This followed a 0.5 percent March increase. Unfilled orders, down four of the last five months, decreased $1.1 billion or 0.1 percent to $1,202.4 billion. This followed a 0.1 percent March increase. The unfilled orders-to-shipments ratio was 6.98, down from 6.99 in March. Inventories, up two of the last three months, increased $0.6 billion or 0.1 percent to $649.0 billion. This followed a 0.1 percent March decrease. The inventories-to-shipments ratio was 1.35, up from 1.34 in March.

New orders for manufactured durable goods in April, down two of the last three months, decreased $2.3 billion or 1.0 percent to $234.4 billion, up from the previously published 0.5 percent decrease. This followed a 5.1 percent March increase. Transportation equipment, also down two of the last three months, led the decrease, $1.9 billion or 2.4 percent to $77.9 billion. New orders for manufactured nondurable goods increased $0.5 billion or 0.2 percent to $242.3 billion.

Advertisement

Outside of transportation, manufacturing was flat. That doesn’t negate the issue, although it could tend to mitigate it if other areas of the economy provide a backstop for it. The trade deficit provided some indication of improvement from a poor March, suggesting that trade had resumed more of its traditional character:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $40.9 billion in April, down $9.7 billion from $50.6 billion in March, revised. April exports were $189.9 billion, $1.9 billion more than March exports. April imports were $230.8 billion, $7.8 billion less than March imports.

The April decrease in the goods and services deficit reflected a decrease in the goods deficit of $9.3 billion to $60.7 billion and an increase in the services surplus of $0.4 billion to $19.8 billion.

It’s not all great news. Imports may have decreased over the past year by $5.4 billion, but exports have also decreased by $4.9 billion over the same period. Still, those improvements over March will add positive margin to the GDP report in Q2, perhaps enough to keep the quarter from going into the red and into recession. If the new job numbers are reflected in the BLS report on Friday, it will indicate that businesses are betting on black ink in the current quarter — but not big growth, either. It’s very much a mixed bag.

Advertisement

Update: Fixed the forgotten link to the trade report, and modified the headline from its draft form.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement
David Strom 10:00 AM | April 16, 2024
Advertisement